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Link download full of Download Test bạnk for Business Driven Technology
6th Edition by Baltzan
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driven-technology-6th-edition-by-baltzan
Chapter 02
Identifying Competitive Advantages
True / False Questions
1. Porter's Five Forces Model outlines the process for a sales strategy.
True False
2-1
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill Education.
2-2 .
2. With the Five Forces Model, companies should watch the forces in the market. If the forces are
strong, competition generally increases, and if the forces are weak, competition typically
decreases.
True False
3. A leadership plan that achieves a specific set of goals or objectives is a business strategy.
Copyright © 2015 McGraw-
True False
4. When a company is the first to market with a competitive advantage, it gains a particular benefit
known as competitive intelligence.
True False
5. Two ways to reduce buyer power are through switching costs and loyalty programs.
True False
6. Mark Peterson identified the Five Forces Model, which analyzes the competitive forces within a
business environment.
2-3 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
True False
7. There are many challenges to changing doctors, including transferring medical records and
losing the doctor-patient relationship along with the doctor's knowledge of the patient's history.
Changing doctors provides a great example of switching costs.
True False
8. Supplier power is one of Porter's five forces, and it measures the suppliers' ability to influence
the prices they charge for supplies (including materials, labor, and services).
True False
9. Polaroid had a unique competitive advantage for many years until it forgot to observe
competitive intelligence. The firm went bankrupt when people began taking digital pictures.
Polaroid provides a great example of Porter's threat of new entrants.
True False
10. Product differentiation occurs when a company develops unique differences in its products or
2-4 .
services with the intent to influence demand.
True False
11. Buyer power is the ability of buyers to affect the price they must pay for an item.
True False
12. Tiffany & Company competes in the marketplace by offering high-cost custom jewelry. Tiffany &
Company is following a broad market and cost leadership strategy.
True False
13. Porter has identified three generic business strategies, including focused, broad cost leadership,
and switching strategy.
True False
14. According to Porter's three generic strategies, Walmart is following a business strategy that
focuses on "broad market and low cost."
True False
2-5 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
15. Value chain analysis views a firm as a series of business processes that each add value to the
product or service.
True False
16. A standardized set of activities that accomplish a specific task is called a supply chain component.
True False
17. The value chain will group a company's activities into two categories: primary value activities
and support value activities.
True False
Multiple Choice Questions
18. Which of the following is not a typical way that a company would duplicate a competitive
advantage?
2-6 .
A. Acquiring the new technology.
B. Copying the business operations.
C. Hiring away key employees.
D. Carrying large product inventories.
19. When a company is the first to market with a competitive advantage, this is called a first-mover
advantage. All of the following companies were first-movers except ____________.
A. FedEx - the online self-service software
B. Apple - iPad
C. Apple - iPod
D. Microsoft - Bing search engine
2-7 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
20. A business strategy achieves a specific set of goals, which include __________.
A. developing new products or services and attracting new competition
B. increasing costs and attracting new competition
C. attracting new customers and developing new products or services
D. All of these
21. Competitive intelligence is the process of gathering information about the competitive
environment, including _________.
A. competitors' employees
B. competitors' differentiated processes
C. competitors' plans
2-8 .
D. All of these
22. Which of the following is a tool a manager can use to analyze competitive intelligence and
identify competitive advantages?
A. The three generic strategies
B. The threat of substitute buyer power
C. Differentiated costs
D. Supplier loyalty
23. Identifying competitive advantages can be difficult and explains why they are typically _______.
A. temporary
B. satisfactory
C. terminated
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Education.
D. unsuccessful
24. Updating business strategies is a continuous undertaking, as internal and external environments
________.
A. become less competitive
B. rmain stagnant
C. rapidly change
D. become more consistent
25. Which of the following is a reason why competitive advantages are typically temporary?
A. The competitor hiring your key employees.
B. The competitor seeking ways to duplicate your business operations.
2-10 .
C. The competitor acquiring new technology.
D. All of these.
26. What is a competitive advantage?
A. A feature of a product or service on which customers place a lesser value on than on similar
offerings from a new competitor.
B. A brand name customers place a greater value on than the quality of the product or service.
C. A service that customers place a lesser value on than similar offerings from a supplier.
D. A feature of a product or service on which customers place a greater value than on similar offerings
from competitors.
27. All of the following are common tools used in industry to analyze and develop competitive
advantages, except:
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Education.
A. Five Forces Model
B. Three generic strategies
C. Competitive analysis model
D. Value chain analysis
28. Greg Provenzo owns and runs a Blockbuster video store. Greg is implementing a drive-thru
rental process that is the same as you would find at a fast-food restaurant. Customers can pick
up and drop off their videos without leaving their cars. Greg's new system has become so
popular that Videos Plus, a competitor down the street, is attempting to re-create Greg's video
drive-thru rental process. Greg's system is an example of a _________.
A. supply chain power
B. first-mover advantage
C. business processing strategy
2-12 .
D. business intelligence
29. The process of gathering information about the competitive environment, including competitors'
plans, activities, and products, to improve a company's ability to succeed is the definition of
___________.
A. feedback
B. information
C. competitive intelligence
D. data
30. Steve Jobs and Apple created a big advantage in the technology industry with the introduction
of the iPod, iPhone, and iPad. What are these all examples of?
A. Competitive advantage
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Education.
B. Competitive intelligence
C. First-mover advantage
D. All of these
31. Paula Logston is the owner and operator of a high-end online custom clothing company. Paula
has never heard of Porter's Five Forces Model, and she wants to understand why she should
perform an analysis using it. If you were tasked with explaining Porter's Five Forces Model to
Paula, what would be the primary reason she would want to use this type of analysis?
A. To help Paula choose a clothing business focus.
B. To help Paula evaluate the attractiveness of the clothing industry.
C. To help Paula evaluate and execute business goals.
D. All of these.
2-14 .
32. A __________ advantage features a product or service on which customers place a greater
value than they do on similar offerings from competitors.
A. competitive
B. competitor
C. power
D. first-mover
33. The Victory Wireless store in Denver is currently offering a fabulous marketing strategy for
potential new iPhone customers. Victory Wireless offers customers who purchase an iPhone
with a two-year subscription a free OtterBox phone case, car charger, ear phones, and
speakers. In terms of Porter's Five Forces, what is Victory Wireless attempting to achieve with
this marketing strategy?
A. Increase buyer power.
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Education.
B. Increase substitute products.
C. Decrease supplier power.
D. Decrease buyer power.
34. Gina Brooks works for Aquarium Retail Services selling high-end saltwater fish and tank
supplies. Aquarium Retail Services is the current market leader in Gina's city. Gina has recently
been approached by Deep Blue Incorporated with an opportunity to run its corporate nationwide
marketing and sales division. Gina decides to jump at the opportunity! Deep Blue is attempting
to gain a competitive ________ by stealing its competitor's key employees.
A. power
B. entry barrier
C. advantage
D. loyalty
2-16 .
35. The banking industry has implemented several competitive advantages, including ATMs, online
bill-pay services, and electronic statements. Of course, these competitive advantages were
quickly duplicated by any competitor that wanted to remain in the banking industry. These are
examples of ___________.
A. acquiring new technology products and services
B. hiring new employees
C. reducing expenses
D. gaining invaluable feedback from customers
36. Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales.
Which of the following is not one of the potential pressures that can hurt sales?
A. Suppliers can drive down profits by charging more for supplies.
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Education.
B. New market entrants can steal potential investment capital.
C. Substitute products can steal customers.
D. All of these.
37. Which of the following is included in Porter's Five Forces Model?
A. Loyalty expenses.
B. Supply chain management.
C. The power of competitors.
D. Systems thinking.
38. Kevin Campbell is an incoming freshman at your college. Kevin is frustrated by the cost of
books, tuition, and expenses, and he also needs to purchase a rather expensive laptop. In an
effort to save money, Kevin begins a Facebook group finding other college students who need
2-18 .
to purchase laptops. Soon, Kevin's Facebook group has close to 100,000 students. Kevin
decides to collectively approach different computer companies to see if his group qualifies for a
special discount. What business strategy is Kevin using to purchase laptops?
A. Collecting business intelligence.
B. Decreasing entry barriers.
C. Purchasing a substitute product.
D. Increasing buyer power.
39. ___________ make customers reluctant to switch to another product or service.
A. Support activities
B. Switching costs
C. Loyalty rewards
D. Value chain activities
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Education.
40. Callie Crystal owns and operates one of the most successful local coffee shops in Denver,
called The Edgewater Café. Each time a customer purchases their 100th cup of coffee at The
Edgewater Café, they receive a free pound of coffee of their choice. What is Callie attempting to
create with her unique "Free Pound of Coffee" marketing program?
A. Reducing buyer power with a loyalty program.
B. Increasing buyer power with a loyalty program.
C. Decreasing supplier power with a differentiated product.
D. Creating a substitute product.
41. What includes all parties involved, directly or indirectly, in obtaining raw materials or a product?
A. Support chain.
2-20 .
B. Supply chain.
C. System chain.
D. Supply choice.
42. Which of the following represents a company in a supply chain?
A. Customer and competitor.
B. Supplier and competitor.
C. Knowledge worker and supplier.
D. Supplier and customer.
43. In the center of Porter's Five Forces Model is competition. Which of the following represents the
four outer boxes?
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Education.
A. Buyer power, systems power, threat of false entrants, and threat of substitute products or services
B. Buyer power, systems power, threat of new entrants, and threat of substitute products or services
C. Buyer power, supplier power, threat of new entrants, and threat of substitute products or services
D. Business power, supplier power, threat of new entrants, and threat of powerful services
44. Shawn McGill is on the executive board for ABC Pharmaceuticals. The company produces the
number-one-selling cancer-fighting drug on the market. Due to its incredible success, ABC
pharmaceuticals has decided to increase the cost of the drug from $8 a pill to $15 a pill. Which
force is ABC Pharmaceuticals using to increase its drug price?
A. Supplier power.
B. Buyer power.
C. Threat of false entrants.
D. Business power.
2-22 .
45. What is one of the most common ways a company can decrease supplier power?
A. Charge lower prices.
B. Charge higher prices.
C. Use MIS to find and create alternative products.
D. Companies cannot affect supplier power.
46. If a supplier has high power, what can it do to influence its industry?
A. Charge higher prices.
B. Shift costs to industry participants.
C. Limit quality or services.
D. All of these.
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Education.
47. When buyer power is low, supplier power is typically ______.
A. identical
B. high
C. low
D. unstable
48. How can a company reduce the threat of substitute products or services?
A. Market the product to fewer than 10 customers.
B. Ignore competitive forces.
C. Offer additional value through wider product distribution.
2-24 .
D. Offer less value, making the product far more generic and similar to the competition.
49. Which one of Porter's five forces is high when it is easy for new competitors to enter a market
and low when there are significant entry barriers to joining a market?
A. Threat of new entrants.
B. Threat of substitute products or services.
C. Threat of buyer power.
D. Supply chain competition.
50. John Cleaver is the CEO of Tech World, which is a retail store that sells computers, monitors,
cameras, televisions, and many other electronic products. John and his executive team are
meeting to brainstorm new ideas on how to grow the business. One idea is to mimic the product
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Education.
of a competitor that is attempting to sell a new product in a different industry. After performing a
Porter's Five Forces analysis, John determines that all of the forces are high in this new
industry.
What should John do?
A. Explode into the market with an overflow of the product.
B. Contemplate other products to introduce at the same time in this new market.
C. Compare the competitor's prices and offer his product lower in this new market.
D. Not introduce the product. Because all five forces are strong, introducing the product would be a
highly risky business strategy.
51. What is a feature of a product or service that customers have come to expect and that entering
competitors must match if they want to survive?
A. Significant barrier.
2-26 .
B. Entry barrier.
C. Product differentiation.
D. Entry chain.
52. Which of the following represents a typical supply chain?
A. Company - Customers - Suppliers.
B. Company - Suppliers - Customers.
C. Suppliers - Company - Customers.
D. Suppliers - Customers - Company.
53. Imagine you are creating a new product to sell in an up and coming market. Which of the
following statements indicates that it would be easy for you, as the new entrant, to compete in
this market?
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Education.
A. The threat of new entrants is high in the up and coming market.
B. The threat of new entrants is low in the up and coming market.
C. The threat of new entrants is impossible to define in the up and coming market.
D. All of these, depending on the time of year.
54. Imagine you are creating a new product to sell in an up and coming market. Which of the
following statements indicates that it would be difficult for you to enter this new market?
A. The threat-of-new-entrants is high in the up and coming market.
B. The threat-of-new-entrants is low in the up and coming market.
C. The threat-of-new-entrants is high during the summer months in the up-and-coming market.
D. All of these, depending on the time of year.
2-28 .
55. Which of the following offers an example where Porter's five forces are mostly strong and
competition is high?
A. A dog walking business.
B. A ski resort.
C. A professional hockey team.
D. All of these.
56. Which of the following offers an example where Porter's five forces are mostly weak and
competition is low?
A. An international hotel chain purchasing milk.
B. A coffee shop.
C. A single consumer purchasing milk.
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Education.
D. A dog walking business.
57. Some industries' competition is much more intense than others. Retail grocery stores, such as
Kroger, Safeway, and Albertson's in the United States, experience fierce competition and offer
similar marketing campaigns to compete. What is this an example of in terms of Porter's Five
Forces?
A. Rivalry among new entrants.
B. Rivalry among existing competitors.
C. Threat of substitute products or services.
D. Buyer power.
2-30 .
58. Amazon.com uses a customer-profiling system whenever a customer visits its website. Using
this system, Amazon can offer products tailored to that particular customer's profile and buying
pattern. What is Amazon using to achieve this competitive advantage?
A. Rivalry.
B. Buyer power.
C. Product differentiation.
D. Substitute product.
59. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces
Model. Which of the following represents supplier power in the music industry?
A. Established record labels like EMI, Sony, and Universal.
B. Walmart, Target, iTunes.
C. Game systems like Wii and social networks like Facebook.
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Education.
D. Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.
60. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces
Model. Which of the following represents buyer power in the music industry?
A. Established record labels like EMI, Sony, and Universal.
B. Walmart, Target, and iTunes.
C. Independent record labels.
D. Game systems like Wii and social networks like Facebook.
61. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces
Model. Which of the following represents the threat of substitute products or services in the
music industry?
2-32 .
A. Established record labels like EMI, Sony, and Universal.
B. Independent record labels.
C. Game systems like Wii and social networks like Facebook.
D. Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.
62. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
Forces Model. Which of the following represents supplier power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
2-33 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
63. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
Forces Model. Which of the following represents buyer power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
64. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
Forces Model. Which of the following represents a threat of a new entrant in the soft drink
industry?
2-34 .
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
65. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
Forces Model. Which of the following represents a substitute product in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
2-35 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
66. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
Forces Model. Which of the following represents rivalry in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their
products during games.
67. Porter identified three generic strategies that a business could follow after identifying a market it
wanted to enter. Which of the following is not included as one of Porter's three generic
strategies?
A. Broad differentiation.
2-36 .
B. Supplier cost differentiation.
C. Focused strategy.
D. Broad cost leadership.
68. According to Porter's three generic strategies for entering a market, if you have a focused
strategy what market should you target?
A. A niche market.
B. A broad market.
C. Neither niche or broad markets.
D. Both niche and broad markets.
69. Which of the following offers an example of a company operating in a narrow, focused market
operating as the low-cost provider?
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Education.
A. Walmart.
B. Tiffany & Co.
C. Neiman Marcus.
D. Payless Shoes.
70. Broad differentiation, broad cost leadership, and _________ are the three generic strategies
identified by Porter.
A. narrow market leadership
B. high cost versus low cost
C. focused strategy
D. none of these
2-38 .
71. Jennifer Bloom is writing a paper and she must determine which of Porter's three generic
strategies The Museum Company has implemented. Jennifer finds out that The Museum
Company offers specialty products found only in museums around the world to affluent customers.
What would Jennifer determine The Museum Company is using as its generic strategy?
A. Broad market, low cost.
B. Narrow market, high cost.
C. Broad market, high cost.
D. Narrow market, low cost.
72. According to Porter, companies that wish to dominate broad markets should operate using a
________ strategy.
A. cost leadership with a low cost
B. differentiation with a low cost
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Education.
C. cost leadership with a high cost
D. all of these
73. Which of the following demonstrates a company that has implemented a low-cost, broad-market
strategy?
A. Neiman Marcus.
B. Payless Shoes.
C. The Sharper Image.
D. Walmart.
74. If a business is following a focused strategy, then its competitive scope is ________.
A. broad market
2-40 .
B. narrow market
C. broad range of products
D. broad range of services
75. When applying Porter's three generic strategies, Tiffany & Co. has a competitive scope and cost
strategy that is a __________.
A. broad market, high cost strategy
B. narrow market, low cost strategy
C. narrow market, high cost strategy
D. broad market, low cost strategy
76. In the bookstore industry, some of today's businesses compete with different business
strategies and cost strategies. Which of the following is using a broad market competitive scope
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Education.
along with a low cost strategy?
A. Amazon.com.
B. Any local independent bookstore that specializes in antique books.
C. Barnes & Noble.
D. Borders Books.
77. Which of the following is similar to focused strategy versus broad strategy?
A. Large market versus leadership.
B. Large market versus uniqueness.
C. Niche market versus large market.
D. Niche market versus generic.
2-42 .
78. Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter's three
generic strategies. Which of the following companies are using a differentiation strategy?
A. Southwest, Horizon, Frontier, and JetBlue.
B. British Airways, Singapore Airlines, and Virgin Atlantic.
C. Sky Taxi, a rent-by-the-hour personal plane service.
D. All of these.
79. Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter's three
generic strategies. Which of the following companies are using a focused strategy?
A. Southwest, Horizon, Frontier, and JetBlue.
B. British Airways, Singapore Airlines, and Virgin Atlantic.
C. Sky Taxi, a rent-by-the-hour personal plane service.
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D. All of these.
80. According to Porter's value chain analysis, which of the following provides customer support
after the sale of goods and services?
A. Inbound logistics.
B. Outbound logistics.
C. Operations.
D. Service.
81. Which of the following represents procurement as part of the support value activities in a value
chain analysis?
A. Purchases inputs, such as raw materials, resources, equipment, and supplies.
2-44 .
B. Applies MIS to processes to add value.
C. Distributes goods and services to customers.
D. Promotes, prices, and sells products to customers.
82. What includes support-value activities and primary-value activities and is used to determine how
to create the greatest possible value for customers?
A. Supplier power.
B. Operations management.
C. Porter's Five Forces Model.
D. Value chain analysis.
83. What is a standardized set of activities that accomplishes a specific task?
A. Business strategy.
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Education.
B. Business outcome.
C. Business process.
D. Knowledge process.
84. Which of the following analyzes a company's business processes and is useful for determining
how to create the greatest possible value for customers?
A. Product analysis.
B. Primary supplier power.
C. Value chain analysis.
D. Buyer chain analysis.
85. The goal of value chain analysis is to identify processes in which the firm can add value for the
2-46 .
customer and create a competitive advantage for itself, with a ________ or ________________.
A. focused strategy, product differentiation
B. focused strategy, cost advantage
C. cost advantage, primary value activities
D. cost advantage, product differentiation
86. What are the two main categories in a value chain analysis?
A. Primary value activities and secondary value activities.
B. Primary value activities and support value activities.
C. Primary value activities and strengthening value activities.
D. None of these.
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Education.
87. Which of the following is not considered a category within the primary value activities in a value
chain analysis?
A. Inbound logistics.
B. Firm infrastructure.
C. Operations.
D. Service.
88. Which of the following is not considered a category within the support value activities in a value
chain analysis?
A. Technology development.
B. Outbound logistics.
2-48 .
C. Human resource management.
D. Firm infrastructure.
89. What is the support value activity that hires employees and provides them with training and
compensation?
A. Procurement.
B. Operations resource management.
C. Human resource management.
D. Firm infrastructure.
90. Sandy Fiero works as the Chief Knowledge Officer for Bend Lumbar Company. She has been
given the responsibility to create a product or service that will bring an added value to its
customers to increase the company's revenue. Sandy determines that the best value she can
add is by creating a service that offers free next-day shipping on any order over $50. Where in
the value chain is Sandy adding value?
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Education.
A. The primary value activity outbound logistics.
B. The primary value activity inbound logistics.
C. The primary value activity marketing and sales.
D. The primary value activity operations.
91. When evaluating the value chain, all of the following are included in the primary value activities
except:
A. Inbound activities.
B. Operations.
C. Service.
D. MIS development.
2-50 .
92. When evaluating the value chain, which of the following is included in the support value
activities?
A. Inbound activities.
B. Marketing and sales.
C. Firm infrastructure.
D. Finance and sales.
93. Which of the following decisions does a firm need to make as soon as it has identified the
activities from the value chain that are bringing the highest added value to their customers?
A. Target high value-adding activities to further enhance their value.
B. Target low value-adding activities to increase their value.
C. Perform some combination of the two.
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D. All of these.
94. MIS can add value to both primary activities and support activities in the value chain. Which of
the following is not an example of a company adding value by using MIS in a primary activity?
A. Scottrade Corp. creating an online system for employees to track paychecks, benefits, the
wellness-rewards program, and other employee benefit items.
B. A system for the sales and marketing departments to track specific sales targets and follow-up
processes.
C. An easy electronic survey to be sent to the customer right after a service is completed.
D. Royal Crest Dairy placing their order and delivery system on an easily accessible Web portal so
customers can track delivery status.
95. MIS can add value to both primary and support activities within a business. Which of the
following is not an example of a company adding value by the use of MIS in a support activity?
2-52 .
A. Netflix creating a business strategy for the video rental market that delivers videos via the mail.
B. The human resources department creates a tracking system to efficiently reward employees based
on their performance.
C. Scottrade Corp. creating an online system for employees to track paychecks, benefits, their
wellness-rewards program, and other employee benefit items.
D. The University of Forks creates a program to automatically order office supplies, such as pens and
pads of paper, for its employees.
Fill in the Blank Questions
96. Business strategies that match _______ company competencies to opportunities result in a
competitive advantage.
________________________________________
97. Competitive __________ is the process of gathering information about the competitive
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Education.
environment, including competitors' plans, activities, and products, to improve a company's
ability to succeed.
________________________________________
98. Apple utilized the first-mover ________ with its iPod product.
________________________________________
99. Michael Porter identified pressures that can hurt potential sales. Knowledgeable customers can
force __________ prices by pitting rivals against each other.
________________________________________
100. The Porter's Five Forces Model analyzes the competitive forces within the environment in which
a company operates to assess the potential for __________ in an industry.
________________________________________
101. __________ power measures the ability of buyers to affect the price they must pay for an item.
2-54 .
________________________________________
102. The threat of substitute products or services is _____ when there are many alternatives to a
product or service and low when there are few alternatives from which to choose.
________________________________________
103.The __________ chain consists of all parties involved, directly or indirectly, in obtaining raw
materials or a product.
________________________________________
104. Rivalry among existing competitors is __________ when competition is fierce in a market and low
when competitors are more complacent.
________________________________________
105. Porter has identified three _________ business strategies for entering a new market: (1) broad
cost leadership, (2) broad differentiation, and (3) focused strategy.
________________________________________
106. Focused strategies concentrate on either cost leadership or ___________.
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Education.
________________________________________
107. Porter suggests adopting only __________ of the three generic strategies.
________________________________________
108. A __________ chain analysis views a firm as a series of business processes that each add value
to the product or service.
________________________________________
109. __________ value activities are found at the bottom of the value chain. These include business
processes that acquire raw materials and manufacture, deliver, market, sell, and provide
aftersales services.
________________________________________
110.___________ value activities are found along the top of the value chain and include business
processes, such as firm infrastructure, human resource management, technology development,
and procurement, that support the primary value activities.
2-56 .
________________________________________
Essay Questions
111. Explain why competitive advantages are temporary.
112. Describe Porter's Five Forces Model and explain each of the five forces.
113.Compare Porter's three generic strategies.
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Education.
114. Demonstrate how a company can add value by using Porter's value chain analysis.
Chapter 02 Identifying Competitive Advantages Answer Key
True / False Questions
1. Porter's Five Forces Model outlines the process for a sales strategy.
(p. 20)
2-58 .
FALSE
Porter's Five Forces Model analyzes the competitive forces within the environment in which a
company operates to assess the potential for profitability in an industry.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
2. With the Five Forces Model, companies should watch the forces in the market.
If the forces are
(p. 20) strong, competition generally increases, and if the forces are weak, competition typically
decreases.
TRUE
With the Five Forces Model, companies should watch the forces in the market. If the forces are
strong, competition generally increases, and if the forces are weak, competition typically
decreases.
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Education.
AACSB: Reflective Thinking
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Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
3. A leadership plan that achieves a specific set of goals or objectives is a business strategy.
(p.18)
TRUE
A leadership plan that achieves a specific set of goals or objectives.
AACSB: Reflective Thinking
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
2-60 .
4. When a company is the first to market with a competitive advantage, it gains a particular (p. 19)
benefit known as competitive intelligence.
FALSE
When a company is the first to market with a competitive advantage, it gains a particular benefit
known as a first-mover advantage.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
5. Two ways to reduce buyer power are through switching costs and loyalty programs.
(p.20
21)
TRUE
Two ways to reduce buyer power are through switching costs and loyalty programs.
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Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
6. Mark Peterson identified the Five Forces Model, which analyzes the competitive forces within a (p.
20) business environment.
FALSE
Michael Porter created the Porter's Five Forces Model, which analyzes the competitive forces
within a business environment.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
7. There are many challenges to changing doctors, including transferring medical records and
(p.20) losing the doctor-patient relationship along with the doctor's knowledge of the patient's history.
2-62 .
Changing doctors provides a great example of switching costs.
TRUE
Switching costs are costs that make customers reluctant to switch to another product or service.
Switching costs include financial as well as intangible values.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
8. Supplier power is one of Porter's five forces, and it measures the suppliers' ability to influence (p.
21) the prices they charge for supplies (including materials, labor, and services).
TRUE
Supplier power is one of Porter's five forces. It measures the suppliers' ability to influence the
prices they charge for supplies (including materials, labor, and services).
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AACSB: Technology
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
9. Polaroid had a unique competitive advantage for many years until it forgot to observe
(p.21) competitive intelligence. The firm went bankrupt when people began taking digital pictures.
Polaroid provides a great example of Porter's threat of new entrants.
FALSE
This is an example of Porter's threat of substitute products or services.
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Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
2-64 .
10. Product differentiation occurs when a company develops unique differences in its products or (p.
22) services with the intent to influence demand.
TRUE
Product differentiation occurs when a company develops unique differences in its products or
services with the intent to influence demand.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
11. Buyer power is the ability of buyers to affect the price they must pay for an item. (p. 20) TRUE
Buyer power is the ability of buyers to affect the price they must pay for an item.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
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Education.
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
12. Tiffany & Company competes in the marketplace by offering high-cost custom jewelry. Tiffany (p.
24) & Company is following a broad market and cost leadership strategy.
FALSE
Tiffany & Company is following a focused market with high cost differentiation strategy.
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Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
13. Porter has identified three generic business strategies, including focused, broad cost (p. 23)
leadership,
and switching strategy.
2-66 .
FALSE
Porter has identified three generic business strategies: (1) broad cost leadership, (2) broad
differentiation, and (3) focused strategy.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
14. According to Porter's three generic strategies, Walmart is following a business strategy that (p.
24) focuses on "broad market and low cost."
TRUE
An example of a business that uses the business strategy "broad market and low cost" is Walmart.
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Keyboard Navigation
Blooms: Understand
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Education.
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
15. Value chain analysis views a firm as a series of business processes that each add value to the (p. 25)
product or service.
TRUE
Value chain analysis views a firm as a series of business processes that each adds value to the
product or service.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
16. A standardized set of activities that accomplish a specific task is called a supply chain (p. 24)
component.
2-68 .
FALSE
A standardized set of activities that accomplish a specific task is called a business process.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
Copyright © 2015 McGraw
17. The value chain will group a company's activities into two categories: primary value activities (p.
25) and support value activities.
TRUE
The value chain will group a company's activities into two categories: primary value activities and
support value activities.
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Blooms: Understand
Hill Education.
2-55
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
Difficulty: 2 Medium Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
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Education.
Topic: Value Chain Analysis-Executing Business Strategies
Multiple Choice Questions
18. Which of the following is not a typical way that a company would duplicate a competitive (p. 19)
advantage?
A. Acquiring the new technology.
B. Copying the business operations.
C. Hiring away key employees.
D. Carrying large product inventories.
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19)
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Education.
Ways that companies duplicate competitive advantages include acquiring new technology, copying
the business operations, and hiring away key employees.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
19. When a company is the first to market with a competitive advantage, this is called a first-mover (p.
advantage. All of the following companies were first-movers except ____________.
A. FedEx - the online self-service software
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Education.
B. Apple - iPad
C. Apple - iPod
D. Microsoft - Bing search engine
First-mover advantage is an advantage that occurs when a company can significantly increase
its market share by being first with a competitive advantage. Google was first to market with
search-engine technology.
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Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
19)
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Education.
20. A business strategy achieves a specific set of goals, which include __________.
(p. 18)
A. developing new products or services and attracting new competition
B. increasing costs and attracting new competition
C. attracting new customers and developing new products or services
D. All of these
A business strategy is a leadership plan that achieves a specific set of goals or objectives such
as developing new products or services, entering new markets, increasing customer loyalty,
attracting new customers, increasing sales, and decreasing costs.
AACSB: Reflective Thinking
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Education.
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
21. Competitive intelligence is the process of gathering information about the competitive (p.
environment, including _________.
A. competitors' employees
B. competitors' differentiated processes
C. competitors' plans
D. All of these
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19)
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Education.
Competitive intelligence is the process of gathering information about the competitive
environment, including competitors' plans, activities, and products, to improve a company's
ability to succeed.
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Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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19)
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Education.
22. Which of the following is a tool a manager can use to analyze competitive intelligence and (p.
identify competitive advantages?
A. The three generic strategies
B. The threat of substitute buyer power
C. Differentiated costs
D. Supplier loyalty
Managers utilize three common tools to analyze competitive intelligence and develop
competitive advantages including: (1) the Five Forces Model, (2) the three generic strategies,
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19)
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Education.
and (3) value chain analysis.
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Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
23. Identifying competitive advantages can be difficult and explains why they are typically _______.
(p. 19)
A. temporary
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Education.
B. satisfactory
C. terminated
D. unsuccessful
Competitive advantages are typically temporary.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
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19)
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Education.
Topic: Identifying Competitive Advantages
24. Updating business strategies is a continuous undertaking, as internal and external (p.
environments ________.
A. become less competitive
B. rmain stagnant
C. rapidly change
D. become more consistent
Updating business strategies is a continuous undertaking, as internal and external environments
rapidly change.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
25. Which of the following is a reason why competitive advantages are typically temporary?
(p.
A. The competitor hiring your key employees.
B. The competitor seeking ways to duplicate your business operations.
C. The competitor acquiring new technology.
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D. All of these.
Competitive advantages are typically temporary, because competitors often quickly seek ways to
duplicate them by acquiring new technology, copying the business operations, and hiring away
key employees.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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Education.
26. What is a competitive advantage?
(p.
A. A feature of a product or service on which customers place a lesser value on than on similar
offerings from a new competitor.
B. A brand name customers place a greater value on than the quality of the product or service.
C. A service that customers place a lesser value on than similar offerings from a supplier.
D. A feature of a product or service on which customers place a greater value than on similar
offerings from competitors.
This is the definition of competitive advantage.
AACSB: Reflective Thinking
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AACSB: Technology
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Blooms: Understand
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
27. All of the following are common tools used in industry to analyze and develop competitive (p.
19) advantages, except:
A. Five Forces Model
B. Three generic strategies
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C. Competitive analysis model
D. Value chain analysis
A competitive analysis model is not discussed in this text.
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Keyboard Navigation
Blooms: Understand
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
28. Greg Provenzo owns and runs a Blockbuster video store. Greg is implementing a drive-thru
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19)
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(p. rental process that is the same as you would find at a fast-food restaurant. Customers can pick
up and drop off their videos without leaving their cars. Greg's new system has become so
popular that Videos Plus, a competitor down the street, is attempting to re-create Greg's video
drive-thru rental process. Greg's system is an example of a _________.
A. supply chain power
B. first-mover advantage
C. business processing strategy
D. business intelligence
The first-mover advantage is an advantage that occurs when a company can significantly increase
its market share by being first with a competitive advantage.
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Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
29. The process of gathering information about the competitive environment, including competitors' (p.
plans, activities, and products, to improve a company's ability to succeed is the definition of
___________.
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A. feedback
B. information
C. competitive intelligence
D. data
Competitive intelligence is the process of gathering information about the competitive
environment, including competitors' plans, activities, and products, to improve a company's
ability to succeed.
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
30. Steve Jobs and Apple created a big advantage in the technology industry with the introduction
(p. of the iPod, iPhone, and iPad. What are these all examples of?
A. Competitive advantage
B. Competitive intelligence
C. First-mover advantage
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D. All of these
Steve Jobs and Apple created a big advantage in the technology industry with their products
the iPod, iPhone, and iPad. These are examples of competitive advantage, competitive
intelligence, and first-mover advantage.
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Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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31. Paula Logston is the owner and operator of a high-end online custom clothing company. Paula
(p. 20) has never heard of Porter's Five Forces Model, and she wants to understand why she should
perform an analysis using it. If you were tasked with explaining Porter's Five Forces Model to
Paula, what would be the primary reason she would want to use this type of analysis?
A. To help Paula choose a clothing business focus.
B. To help Paula evaluate the attractiveness of the clothing industry.
2-92
McGrawHill Education.
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C. To help Paula evaluate and execute business goals.
D. All of these.
One of the three tools company executives often use when analyzing competitive intelligence is
the Five Forces Model. This is used to evaluate industry attractiveness.
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Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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32. A __________ advantage features a product or service on which customers place a greater
(p. value than they do on similar offerings from competitors.
A. competitive
B. competitor
C. power
D. first-mover
A competitive advantage features a product or service on which customers place a greater value
than they do on similar offerings from competitors.
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Education.
AACSB: Reflective Thinking
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Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
33. The Victory Wireless store in Denver is currently offering a fabulous marketing strategy for
(p. 26) potential new iPhone customers. Victory Wireless offers customers who purchase an iPhone with
a two-year subscription a free OtterBox phone case, car charger, ear phones, and speakers. In
terms of Porter's Five Forces, what is Victory Wireless attempting to achieve with this marketing
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19)
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Education.
strategy?
A. Increase buyer power.
B. Increase substitute products.
C. Decrease supplier power.
D. Decrease buyer power.
Victory Wireless is attempting to decrease buyer power by offering products at a lower price or
competing on price.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
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Education.
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
34. Gina Brooks works for Aquarium Retail Services selling high-end saltwater fish and tank
(p. supplies. Aquarium Retail Services is the current market leader in Gina's city. Gina has recently
been approached by Deep Blue Incorporated with an opportunity to run its corporate nationwide
marketing and sales division. Gina decides to jump at the opportunity! Deep Blue is attempting to
gain a competitive ________ by stealing its competitor's key employees.
A. power
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Education.
B. entry barrier
C. advantage
D. loyalty
Ways that companies duplicate competitive advantages include acquiring the new technology,
copying business processes, and hiring away employees.
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AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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Education.
35. The banking industry has implemented several competitive advantages, including ATMs, online
(p. 19) bill-pay services, and electronic statements. Of course, these competitive advantages were
quickly duplicated by any competitor that wanted to remain in the banking industry. These are
examples of ___________.
A. acquiring new technology products and services
B. hiring new employees
C. reducing expenses
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Education.
D. gaining invaluable feedback from customers
The banking industry has utilized competitive advantage by offering ATMs, online bill-pay
services, and e-statements. All of these are examples of ways they duplicated each other by
acquiring new technology products and services.
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AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 2 Medium Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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20)
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Education.
36. Michael Porter defined the Five Forces Model and the potential pressures that can hurt sales.
(p. Which of the following is not one of the potential pressures that can hurt sales?
A. Suppliers can drive down profits by charging more for supplies.
B. New market entrants can steal potential investment capital.
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Education.
C. Substitute products can steal customers.
D. All of these.
Michael Porter defined the Five Forces Model. Before formally presenting his model, he
identified pressures that can hurt potential sales, which include: (1) knowledgeable customers
can force down prices by pitting rivals against each other, (2) influential suppliers can drive
down profits by charging higher prices for supplies, (3) competition can steal customers, (4)
new market entrants can steal potential investment capital, and (5) substitute products can steal
customers.
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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20)
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Education.
37. Which of the following is included in Porter's Five Forces Model?
(p.
A. Loyalty expenses.
B. Supply chain management.
C. The power of competitors.
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D. Systems thinking.
In figure 1.8, Porter's Five Forces Model outlines rivalry among existing competitors, the power of
competitors.
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Navigation
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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20)
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Education.
38. Kevin Campbell is an incoming freshman at your college. Kevin is frustrated by the cost of
(p. books, tuition, and expenses, and he also needs to purchase a rather expensive laptop. In an
effort to save money, Kevin begins a Facebook group finding other college students who need
to purchase laptops. Soon, Kevin's Facebook group has close to 100,000 students. Kevin
decides to collectively approach different computer companies to see if his group qualifies for a
special discount. What business strategy is Kevin using to purchase laptops?
A. Collecting business intelligence.
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B. Decreasing entry barriers.
C. Purchasing a substitute product.
D. Increasing buyer power.
Buyer power is one of Porter's Five Forces, which measures the ability of buyers to affect the
price they must pay for an item. Kevin's group is attempting to increase their buyer power.
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20)
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard
Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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20)
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Education.
39. ___________ make customers reluctant to switch to another product or service.
(p.
A. Support activities
B. Switching costs
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C. Loyalty rewards
D. Value chain activities
Switching costs are costs that make customers reluctant to switch to another product or service.
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Navigation
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20)
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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2-111 -Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill Education.
40. Callie Crystal owns and operates one of the most successful local coffee shops in Denver, (p.
21) called The Edgewater Café. Each time a customer purchases their 100th cup of coffee at The
Edgewater Café, they receive a free pound of coffee of their choice. What is Callie attempting to create
with her unique "Free Pound of Coffee" marketing program?
A. Reducing buyer power with a loyalty program.
B. Increasing buyer power with a loyalty program.
C. Decreasing supplier power with a differentiated product.
D. Creating a substitute product.
One way to reduce buyer power is with a loyalty program, which is a program to reward customers
based on their spending.
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Education.
AACSB: Reflective Thinking
Copyright © 2015 McGraw
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
41. What includes all parties involved, directly or indirectly, in obtaining raw materials or a (p.
21) product?
A. Support chain.
B. Supply chain.
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Education.
C. System chain.
D. Supply choice.
The supply chain includes all parties involved, directly or indirectly, in obtaining raw materials or a
product.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
42. Which of the following represents a company in a supply chain?
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Education.
(p. 21)
A. Customer and competitor.
B. Supplier and competitor.
C. Knowledge worker and supplier.
D. Supplier and customer.
In a typical supply chain, a company will be both a supplier and a customer.
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AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
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Education.
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
43. In the center of Porter's Five Forces Model is competition. Which of the following represents
(p. 20) the four outer boxes?
A. Buyer power, systems power, threat of false entrants, and threat of substitute products or
services
B. Buyer power, systems power, threat of new entrants, and threat of substitute products or
services
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Education.
C. Buyer power, supplier power, threat of new entrants, and threat of substitute products or
services
D. Business power, supplier power, threat of new entrants, and threat of powerful services
The four competitive forces that work among the power of competitors are buyer power, supplier
power, threat of new entrants, and threat of substitute products or services.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
44. Shawn McGill is on the executive board for ABC Pharmaceuticals. The company produces the
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Education.
(p. 21) number-one-selling cancer-fighting drug on the market. Due to its incredible success, ABC
pharmaceuticals has decided to increase the cost of the drug from $8 a pill to $15 a pill. Which
force is ABC Pharmaceuticals using to increase its drug price?
A. Supplier power.
B. Buyer power.
C. Threat of false entrants.
D. Business power.
Supplier power, one of Porter's five forces, measures the suppliers' ability to influence the prices
they charge for supplies (including materials, labor, and services).
AACSB: Reflective Thinking
AACSB: Technology
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Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
45. What is one of the most common ways a company can decrease supplier power?
(p. 21)
A. Charge lower prices.
B. Charge higher prices.
C. Use MIS to find and create alternative products.
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Education.
D. Companies cannot affect supplier power.
Using MIS to find alternative products is one way of decreasing supplier power.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
46. If a supplier has high power, what can it do to influence its industry?
(p. 21)
A. Charge higher prices.
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Education.
B. Shift costs to industry participants.
C. Limit quality or services.
D. All of these.
If the supplier power is high, the supplier can influence the industry by (1) charging higher prices,
(2) limiting quality or services, or (3) shifting costs to industry participants.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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Education.
47. When buyer power is low, supplier power is typically ______.
(p. 21)
A. identical
B. high
C. low
D. unstable
When buyer power is low, supplier power is typically high.
AACSB: Reflective Thinking
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Education.
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
48. How can a company reduce the threat of substitute products or services?
(p. 21)
A. Market the product to fewer than 10 customers.
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Education.
B. Ignore competitive forces.
C. Offer additional value through wider product distribution.
D. Offer less value, making the product far more generic and similar to the competition.
One way a company can reduce the threat of substitute products or services is to offer additional
value through wider product distribution.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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Education.
49. Which one of Porter's five forces is high when it is easy for new competitors to enter a market (p.
22) and low when there are significant entry barriers to joining a market?
A. Threat of new entrants.
B. Threat of substitute products or services.
C. Threat of buyer power.
D. Supply chain competition.
Threat of new entrants, one of Porter's five forces, is high when it is easy for new competitors to
enter a market and low when there are significant entry barriers to joining a market.
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
50. John Cleaver is the CEO of Tech World, which is a retail store that sells computers, monitors,
(p. 23) cameras, televisions, and many other electronic products. John and his executive team are
meeting to brainstorm new ideas on how to grow the business. One idea is to mimic the product
of a competitor that is attempting to sell a new product in a different industry. After performing a
Porter's Five Forces analysis, John determines that all of the forces are high in this new industry.
What should John do?
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Education.
A. Explode into the market with an overflow of the product.
B. Contemplate other products to introduce at the same time in this new market.
C. Compare the competitor's prices and offer his product lower in this new market.
D. Not introduce the product. Because all five forces are strong, introducing the product would be
a highly risky business strategy.
When the five forces are all strong or high, copying a competitor's product is a poor business
strategy. When the forces are low, this is a great time to execute this business strategy.
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Education.
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
51. What is a feature of a product or service that customers have come to expect and that entering (p.
22) competitors must match if they want to survive?
A. Significant barrier.
B. Entry barrier.
C. Product differentiation.
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D. Entry chain.
An entry barrier is a feature of a product or service that customers have come to expect and that
entering competitors must match to survive.
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Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
52. Which of the following represents a typical supply chain?
(p. 21)
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A. Company - Customers - Suppliers.
B. Company - Suppliers - Customers.
C. Suppliers - Company - Customers.
D. Suppliers - Customers - Company.
A traditional business supply chain operates like this: supplier - company - customers.
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
53. Imagine you are creating a new product to sell in an up and coming market. Which of the
(p. 22) following statements indicates that it would be easy for you, as the new entrant, to compete in
this market?
A. The threat of new entrants is high in the up and coming market.
B. The threat of new entrants is low in the up and coming market.
C. The threat of new entrants is impossible to define in the up and coming market.
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D. All of these, depending on the time of year.
The threat of new entrants is high when it is easy for new competitors to enter a market and low
when there are significant entry barriers to joining a market.
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Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
54. Imagine you are creating a new product to sell in an up and coming market. Which of the (p.
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Education.
22) following statements indicates that it would be difficult for you to enter this new market?
A. The threat-of-new-entrants is high in the up and coming market.
B. The threat-of-new-entrants is low in the up and coming market.
C. The threat-of-new-entrants is high during the summer months in the up-and-coming market.
D. All of these, depending on the time of year.
The threat of new entrants is high when it is easy for new competitors to enter a market and low
when there are significant entry barriers to joining a market.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
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Education.
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
55. Which of the following offers an example where Porter's five forces are mostly strong and
(p. 22) competition is high?
A. A dog walking business.
B. A ski resort.
C. A professional hockey team.
D. All of these.
With Porter's Five Forces Model, the following are all examples of situations with strong forces
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and, therefore, increased competition: (1) a single consumer purchasing milk, (2) a company that
makes pencils, (3) coffee from McDonalds, (4) a dog-walking business, and (5) a coffee shop.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
56. Which of the following offers an example where Porter's five forces are mostly weak and (p.
22) competition is low?
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Education.
A. An international hotel chain purchasing milk.
B. A coffee shop.
C. A single consumer purchasing milk.
D. A dog walking business.
With Porter's Five Forces Model, the following are all examples of situations with weak forces
and, therefore, decreased competition: (1) an international hotel chain purchasing milk, (2) a
company that makes airline engines, (3) cancer drugs from a pharmaceutical company, (4) a
professional hockey team, and (4) the Department of Motor Vehicles.
AACSB: Reflective Thinking
AACSB: Technology
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Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
57. Some industries' competition is much more intense than others. Retail grocery stores, such as
(p. 22) Kroger, Safeway, and Albertson's in the United States, experience fierce competition and
offer
similar marketing campaigns to compete. What is this an example of in terms of Porter's Five Forces?
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Education.
A. Rivalry among new entrants.
B. Rivalry among existing competitors.
C. Threat of substitute products or services.
D. Buyer power.
Some industries' competition is much more intense than others. Retail grocery stores, such as Kroger,
Safeway, Albertson's, and Ralph's in the United States, have fierce competition and
similar programs to compete with each other.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
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Education.
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
58. Amazon.com uses a customer-profiling system whenever a customer visits its website. Using
(p. 22) this system, Amazon can offer products tailored to that particular customer's profile and buying
pattern. What is Amazon using to achieve this competitive advantage?
A. Rivalry.
B. Buyer power.
C. Product differentiation.
D. Substitute product.
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Product differentiation is an advantage that occurs when a company develops unique differences
in its products with the intent to influence demand.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
59. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces (p.
21) Model. Which of the following represents supplier power in the music industry?
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Education.
A. Established record labels like EMI, Sony, and Universal.
B. Walmart, Target, iTunes.
C. Game systems like Wii and social networks like Facebook.
D. Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.
An example of supplier power in the music industry includes established record labels like EMI,
Sony, and Universal.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
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Education.
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
60. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces (p.
22) Model. Which of the following represents buyer power in the music industry?
A. Established record labels like EMI, Sony, and Universal.
B. Walmart, Target, and iTunes.
C. Independent record labels.
D. Game systems like Wii and social networks like Facebook.
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Education.
Buyer power in the music industry includes Walmart, Target, and iTunes, which purchase music
from record labels to sell online and in their stores.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
61. Your boss, Ty Jacob, has asked you to analyze the music industry using Porter's Five Forces
(p. 21) Model. Which of the following represents the threat of substitute products or services in the music
industry?
A. Established record labels like EMI, Sony, and Universal.
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Education.
B. Independent record labels.
C. Game systems like Wii and social networks like Facebook.
D. Taylor Swift, Beyonce, The Beatles, and The Rolling Stones.
Game systems like Wii and social networks offer alternatives or substitute products to purchasing
music for a consumer.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
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Education.
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
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62.
(p. 21) Forces Model. Which of the following represents supplier power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
Supplier power in the soft drink industry is represented by Pepsi.
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
63. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
(p. 20) Forces Model. Which of the following represents buyer power in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
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Education.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
Buyer power in the soft drink industry is represented by Walmart.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
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Education.
64.
(p. 20) Forces Model. Which of the following represents a threat of a new entrant in the soft drink
industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
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Education.
Zevia Natural Diet Soda represents a new entrant in the soft drink industry.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
65. Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
(p. 21) Forces Model. Which of the following represents a substitute product in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
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Education.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Vitamin water, fruit juice, and coffee.
Vitamin water, fruit juice, or coffee are all substitute products to a soft drink.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
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Education.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
66.
(p. 22) Forces Model. Which of the following represents rivalry in the soft drink industry?
A. Pepsi requires stores that carry Pepsi products to commit to minimum orders of 1,000 cases.
B. Walmart negotiates a lower cost per bottle from Coke in exchange for premium shelf space in
every Walmart store.
C. Zevia Natural Diet Soda begins selling directly over the Internet.
D. Coke and Pepsi submit bids to the owner of a football stadium for the exclusive sale of their
products during games.
The rivalry between Coke and Pepsi is famous in the soft drink industry.
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Apply
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Education.
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
67. Porter identified three generic strategies that a business could follow after identifying a market
(p. 23) it wanted to enter. Which of the following is not included as one of Porter's three generic
strategies?
A. Broad differentiation.
B. Supplier cost differentiation.
C. Focused strategy.
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Your boss, Kerry Miller, has asked you to analyze the soft drink industry using Porter's Five
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Education.
D. Broad cost leadership.
Porter has identified three generic business strategies for entering a new market: (1) broad cost
leadership, (2) broad differentiation, and (3) focused strategy.
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
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McGrawHill Education.
68. According to Porter's three generic strategies for entering a market, if you have a focused (p.
23) strategy what market should you target?
A. A niche market.
B. A broad market.
C. Neither niche or broad markets.
D. Both niche and broad markets.
According to Porter's three generic strategies for entering a market, if you have a focused
strategy you should target a narrow market, niche market, or a unique market.
AACSB: Reflective Thinking
AACSB: Technology
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24)
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McGrawHill Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
69. Which of the following offers an example of a company operating in a narrow, focused market (p.
operating as the low-cost provider?
A. Walmart.
B. Tiffany & Co.
C. Neiman Marcus.
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McGrawHill Education.
D. Payless Shoes.
Payless competes by offering a specific product (narrow market) at low prices. Their strategy is
to be the low-cost provider of shoes.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business
Focus 70. Broad differentiation, broad cost leadership, and _________ are the three generic strategies
(p. 23) identified by Porter.
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McGrawHill Education.
A. narrow market leadership
B. high cost versus low cost
C. focused strategy
D. none of these
The three strategies proposed by Porter are (1) broad cost leadership, (2) broad differentiation,
and (3) focused strategy.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
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McGrawHill Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
71. Jennifer Bloom is writing a paper and she must determine which of Porter's three generic (p.
strategies The Museum Company has implemented. Jennifer finds out that The
Museum
Company offers specialty products found only in museums around the world to affluent customers.
What would Jennifer determine The Museum Company is using as its generic strategy?
A. Broad market, low cost.
B. Narrow market, high cost.
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McGrawHill Education.
C. Broad market, high cost.
D. Narrow market, low cost.
The Museum Company competes using a narrow market and high cost focus.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
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24)
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Education.
72. According to Porter, companies that wish to dominate broad markets should operate using a (p.
________ strategy.
A. cost leadership with a low cost
B. differentiation with a low cost
C. cost leadership with a high cost
D. all of these
According to Porter, broad markets should use cost leadership with a low cost and differentiation
with a high cost.
AACSB: Reflective Thinking
AACSB: Technology
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24)
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Education.
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
73. Which of the following demonstrates a company that has implemented a low-cost, broad(p.
market strategy?
A. Neiman Marcus.
B. Payless Shoes.
C. The Sharper Image.
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Education.
D. Walmart.
Walmart competes by offering a broad range of products at low prices. Its business strategy is to be
the low-cost provider of goods for the cost-conscious consumer.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
74. If a business is following a focused strategy, then its competitive scope is ________.
(p. 24)
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Education.
A. broad market
B. narrow market
C. broad range of products
D. broad range of services
When you have a market segment, your competitive scope should be a narrow market, and the cost
strategy should be a focused strategy.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
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24)
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Education.
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
75. When applying Porter's three generic strategies, Tiffany & Co. has a competitive scope and (p.
cost strategy that is a __________.
A. broad market, high cost strategy
B. narrow market, low cost strategy
C. narrow market, high cost strategy
D. broad market, low cost strategy
Tiffany & Co. competes by offering a differentiated product, jewelry, at high prices. Its business
strategy allows it to be a high-cost provider of premier designer jewelry to affluent consumers.
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24)
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
24)
Copyright © 2015 McGraw- Hill Education.
76. In the bookstore industry, some of today's businesses compete with different business
(p. strategies and cost strategies. Which of the following is using a broad market competitive scope
along with a low cost strategy?
A. Amazon.com.
B. Any local independent bookstore that specializes in antique books.
C. Barnes & Noble.
D. Borders Books.
Amazon.com competes by offering a broad range of differentiated products at low prices.
AACSB: Reflective Thinking
AACSB: Technology
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
25)
Copyright © 2015 McGraw- Hill Education.
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
77. Which of the following is similar to focused strategy versus broad strategy?
(p. 23)
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A. Large market versus leadership.
B. Large market versus uniqueness.
C. Niche market versus large market.
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McGrawHill Education.
D. Niche market versus generic.
Focused strategies versus broad strategies is synonymous to niche market versus large
market.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility:
Keyboard
Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
78. Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter's three
(p. 23 generic strategies. Which of the following companies are using a differentiation strategy?
24)
A. Southwest, Horizon, Frontier, and JetBlue.
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B. British Airways, Singapore Airlines, and Virgin Atlantic.
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C. Sky Taxi, a rent-by-the-hour personal plane service.
D. All of these.
British Airways, Singapore Airlines, and Virgin Atlantic all compete using differentiation
strategies.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
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McGrawHill Education.
Topic: The Three Generic Strategies-Choosing a Business Focus
79. Your boss, Tom Repicci, has asked you to analyze the airline industry using Porter's three
(p. 23 generic strategies. Which of the following companies are using a focused strategy?
24)
A. Southwest, Horizon, Frontier, and JetBlue.
B. British Airways, Singapore Airlines, and Virgin Atlantic.
C. Sky Taxi, a rent-by-the-hour personal plane service.
D. All of these.
AACSB: Reflective Thinking
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
25)
Copyright © 2015 McGraw- Hill Education.
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
80. According to Porter's value chain analysis, which of the following provides customer support (p.
after the sale of goods and services?
A. Inbound logistics.
B. Outbound logistics.
C. Operations.
D. Service.
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The service activity within the primary value activities will provide customer support after the
sale of goods and services.
AACSB: Reflective Thinking
AACSB: Technology
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Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
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25)
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Education.
81. Which of the following represents procurement as part of the support value activities in a value (p.
chain analysis?
A. Purchases inputs, such as raw materials, resources, equipment, and supplies.
B. Applies MIS to processes to add value.
C. Distributes goods and services to customers.
D. Promotes, prices, and sells products to customers.
Procurement is the part of the support value activities which purchases inputs, such as raw
materials, resources, equipment, and supplies.
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25)
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
82. What includes support-value activities and primary-value activities and is used to determine (p.
how to create the greatest possible value for customers?
A. Supplier power.
B. Operations management.
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Education.
C. Porter's Five Forces Model.
D. Value chain analysis.
The support activity firm infrastructure and the primary value activity of outbound logistics, are both
included in value chain analysis.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
83. What is a standardized set of activities that accomplishes a specific task?
(p. 24)
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Education.
A. Business strategy.
B. Business outcome.
C. Business process.
D. Knowledge process.
A business process is a standardized set of activities that accomplishes a specific task.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
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Education.
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
84. Which of the following analyzes a company's business processes and is useful for determining
(p. how to create the greatest possible value for customers?
A. Product analysis.
B. Primary supplier power.
C. Value chain analysis.
D. Buyer chain analysis.
Value chain analysis views a firm as a series of business processes that each add value to the
product or service.
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
85. The goal of value chain analysis is to identify processes in which the firm can add value for the
(p. customer and create a competitive advantage for itself, with a ________ or ________________.
A. focused strategy, product differentiation
B. focused strategy, cost advantage
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Education.
C. cost advantage, primary value activities
D. cost advantage, product differentiation
The goal of value chain analysis is to identify processes in which the firm can add value for the
customer and create a competitive advantage for itself, with a cost advantage or product
differentiation.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
86. What are the two main categories in a value chain analysis?
(p.
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Education.
A. Primary value activities and secondary value activities.
B. Primary value activities and support value activities.
C. Primary value activities and strengthening value activities.
D. None of these.
The value chain groups a firm's activities into two categories, primary value activities and
support value activities.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
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25)
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Education.
87. Which of the following is not considered a category within the primary value activities in a value (p.
chain analysis?
A. Inbound logistics.
B. Firm infrastructure.
C. Operations.
D. Service.
Primary value activities are found at the bottom of the value chain. These include business
processes that acquire raw materials and manufacture, deliver, market, sell, and provide
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Education.
aftersales services.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
88. Which of the following is not considered a category within the support value activities in a value
(p. chain analysis?
A. Technology development.
B. Outbound logistics.
C. Human resource management.
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Education.
D. Firm infrastructure.
Support value activities are found along the top of the value chain and include business
processes, such as firm infrastructure, human resource management, technology development,
and procurement, that support the primary value activities.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
89. What is the support value activity that hires employees and provides them with training and (p.
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25)
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Education.
compensation?
A. Procurement.
B. Operations resource management.
C. Human resource management.
D. Firm infrastructure.
Human resource management provides employee hiring, training, and compensation.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
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25)
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Education.
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
90. Sandy Fiero works as the Chief Knowledge Officer for Bend Lumbar Company. She has been
(p. given the responsibility to create a product or service that will bring an added value to its
customers to increase the company's revenue. Sandy determines that the best value she can
add is by creating a service that offers free next-day shipping on any order over $50. Where in
the value chain is Sandy adding value?
A. The primary value activity outbound logistics.
B. The primary value activity inbound logistics.
C. The primary value activity marketing and sales.
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Education.
D. The primary value activity operations.
Outbound logistics distributes goods and services to customers.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
91. When evaluating the value chain, all of the following are included in the primary value activities (p.
except:
A. Inbound activities.
B. Operations.
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Education.
C. Service.
D. MIS development.
The primary value activities include (1) inbound logistics, (2) operations, (3) outbound logistics,
(4) marketing and sales, and (5) service.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
92. When evaluating the value chain, which of the following is included in the support value (p.
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Education.
activities?
A. Inbound activities.
B. Marketing and sales.
C. Firm infrastructure.
D. Finance and sales.
The support value activities found along the top of the value chain include (1) firm
infrastructure, (2) human resource management, (3) technology development, and (4)
procurement.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
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25)
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
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26)
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McGrawHill Education.
93. Which of the following decisions does a firm need to make as soon as it has identified the
(p. activities from the value chain that are bringing the highest added value to their customers?
A. Target high value-adding activities to further enhance their value.
B. Target low value-adding activities to increase their value.
C. Perform some combination of the two.
D. All of these.
After a firm has identified the activities from the value chain that are bringing the highest added
value to their customers, they need to make decisions regarding the competitive advantage by
determining whether to (1) target high value-adding activities to further enhance their value, (2)
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McGrawHill Education.
target low value-adding activities to increase their value, or (3) perform some combination of the
two.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
94. MIS can add value to both primary activities and support activities in the value chain. Which of
(p. the following is not an example of a company adding value by using MIS in a primary activity?
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McGrawHill Education.
A. Scottrade Corp. creating an online system for employees to track paychecks, benefits, the
wellness-rewards program, and other employee benefit items.
B. A system for the sales and marketing departments to track specific sales targets and
followup processes.
C. An easy electronic survey to be sent to the customer right after a service is completed.
D. Royal Crest Dairy placing their order and delivery system on an easily accessible Web
portal so customers can track delivery status.
MIS can add value to both primary and support activities within a business. All are primary
activities except Scottrade Corp. creating an online system for employees to track paychecks,
benefits, their wellness-rewards program, and other employee benefit items. This is a support
value activity.
AACSB: Reflective Thinking
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26)
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McGrawHill Education.
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
95. MIS can add value to both primary and support activities within a business. Which of the
(p. following is not an example of a company adding value by the use of MIS in a support activity?
A. Netflix creating a business strategy for the video rental market that delivers videos via the
mail.
B. The human resources department creates a tracking system to efficiently reward employees
based on their performance.
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McGrawHill Education.
C. Scottrade Corp. creating an online system for employees to track paychecks, benefits, their
wellness-rewards program, and other employee benefit items.
D. The University of Forks creates a program to automatically order office supplies, such as
pens and pads of paper, for its employees.
MIS can add value to both primary and support activities within a business. All are support
activities except for the example "Netflix creating a business strategy for the video rental market
that delivers videos via the mail." This is a primary value activity.
AACSB: Reflective Thinking
AACSB: Technology
Accessibility: Keyboard Navigation
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
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26)
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McGrawHill Education.
Fill in the Blank Questions
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Education.
96. Business strategies that match _______ company competencies to opportunities result in a
(p. 19) competitive advantage.
core
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
97. Competitive __________ is the process of gathering information about the competitive
(p. 19) environment, including competitors' plans, activities, and products, to improve a company's ability
to succeed.
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Education.
intelligence
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
98. Apple utilized the first-mover ________ with its iPod product.
(p. 19)
advantage
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
99. Michael Porter identified pressures that can hurt potential sales. Knowledgeable customers
can (p. 20) force __________ prices by pitting rivals against each other.
down
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
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Education.
each of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
100. The Porter's Five Forces Model analyzes the competitive forces within the environment in (p.
20) which a company operates to assess the potential for __________ in an industry.
profitability
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
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Education.
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
101. __________ power measures the ability of buyers to affect the price they must pay for an item.
(p. 20)
Buyer
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
102. The threat of substitute products or services is _____ when there are many alternatives to a (p.
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Education.
21) product or service and low when there are few alternatives from which to choose.
high
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain
each of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
103. The __________ chain consists of all parties involved, directly or indirectly, in obtaining raw (p.
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Education.
21) materials or a product.
supply
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces. Topic: The Five Forces Model-Evaluating
Industry Attractiveness
104. Rivalry among existing competitors is __________ when competition is fierce in a market and (p.
22) low when competitors are more complacent.
high
AACSB: Reflective Thinking
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2-205 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
105. Porter has identified three _________ business strategies for entering a new market: (1) broad
(p. 23) cost leadership, (2) broad differentiation, and (3) focused strategy.
generic
AACSB: Reflective Thinking
AACSB: Technology
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2-206 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies. Topic: The Three Generic Strategies-Choosing
a Business Focus
106. Focused strategies concentrate on either cost leadership or ___________.
(p. 23) differentiation
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
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Education.
107. Porter suggests adopting only __________ of the three generic strategies.
(p. 23)
one
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Understand
Difficulty: 2 Medium Learning Outcome: 02-03 Compare Porter's
three generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
108. A __________ chain analysis views a firm as a series of business processes that each add
(p. 25) value to the product or service.
value
AACSB: Reflective Thinking
AACSB: Technology
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Education.
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
109. __________ value activities are found at the bottom of the value chain. These include
business
(p. 25) processes that acquire raw materials and manufacture, deliver, market, sell, and provide
aftersales services.
Primary
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Education.
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis. Topic: Value Chain Analysis-
Executing Business Strategies
110. ___________ value activities are found along the top of the value chain and include business
(p. 25) processes, such as firm infrastructure, human resource management, technology development,
and procurement, that support the primary value activities.
Support
AACSB: Reflective Thinking
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Education.
AACSB: Technology
Blooms: Remember
Difficulty: 1 Easy Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies
Essay Questions
111. Explain why competitive advantages are temporary.
(p. 19)
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Education.
A competitive advantage is a feature of a product or service on which customers place a
greater value than they do on similar offerings from competitors. Competitive advantages
provide the same product or service either at a lower price or with additional value that can
fetch premium prices. Unfortunately, competitive advantages are typically temporary, because
competitors often quickly seek ways to duplicate them. In turn, organizations must develop a
strategy based on a new competitive advantage. Ways that companies duplicate competitive
advantages include acquiring the new technology, copying business processes, and hiring
away employees.
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-01 Explain why competitive
advantages are temporary.
Topic: Identifying Competitive Advantages
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2-212 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGrawHill
Education.
112. Describe Porter's Five Forces Model and explain each of the five forces.
(p. 20
22)
Porter's Five Forces Model analyzes the competitive forces within the environment in which a
company operates, to assess the potential for profitability in an industry. Buyer power is the
ability of buyers to affect the price they must pay for an item. Supplier power is the suppliers'
ability to influence the prices they charge for supplies (including materials, labor, and services).
Threat of substitute products or services is high when there are many alternatives to a product or
service and low when there are few alternatives from which to choose. Threat of new entrants is
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Education.
high when it is easy for new competitors to enter a market and low when there are significant
entry barriers to entering a market. Rivalry among existing competitors is high when competition
is fierce in a market and low when competition is more complacent.
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-02 Describe Porter's Five Forces Model and explain each
of the five forces.
Topic: The Five Forces Model-Evaluating Industry Attractiveness
113. Compare Porter's three generic strategies.
(p. 23)
Organizations typically follow one of Porter's three generic strategies when entering a new
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Education.
market: (1) broad cost leadership, (2) broad differentiation, or (3) focused strategy. Broad
strategies reach a large market segment. Focused strategies target a niche market. Focused
strategies concentrate on either cost leadership or differentiation.
AACSB: Reflective Thinking
AACSB: Technology
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-03 Compare Porter's three
generic strategies.
Topic: The Three Generic Strategies-Choosing a Business Focus
114. Demonstrate how a company can add value by using Porter's value chain analysis.
(p. 25)
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Education.
To identify competitive advantages, Michael Porter created value chain analysis, which views a
firm as a series of business processes that each add value to the product or service. The goal
of value chain analysis is to identify processes in which the firm can add value for the customer
and create a competitive advantage for itself, with a cost advantage or product differentiation.
The value chain groups a firm's activities into two categories - primary value activities and
support value activities. Primary value activities acquire raw materials and manufacture,
deliver, market, sell, and provide after-sales services. Support value activities, along the top of
the value chain in the figure, include firm infrastructure, human resource management,
technology development, and procurement. Not surprisingly, these support the primary value
activities.
AACSB: Reflective Thinking
From https://testbankgo.eu/p/Test-Bank-for-Business-Driven-Technology-6th-Edition-by-Baltzan
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Education.
AACSB: Technology
Blooms: Analyze
Difficulty: 3 Hard Learning Outcome: 02-04 Demonstrate how a company can add value by using Porter's
value chain analysis.
Topic: Value Chain Analysis-Executing Business Strategies